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Howes: After three-year reboot, Detroit auto show hits inflection point

The Detroit News
Daniel Howes
Sept. 13, 2022

The Detroit auto show is back. Or is it?

After a three-year hiatus and a radical makeover driven by the COVID-19 pandemic and an exodus of global automakers, the North American International Auto Show is attempting to reinvent itself — just like its hometown companies and their rivals amid the undeniable pivot to electrification.

How and whether the show’s organizers succeed will depend far more on paying customers than the pared-down ranks of cynical media hands or the winnowing number of automakers calculating returns on their auto show investment. Most of those companies already have done such calculations, and that they won’t officially be on the Detroit show’s floor offers one answer, anyway.

But this is still the Motor City, home to General Motors Co., Ford Motor Co. and the cash-generating North American engine powering Stellantis NV. A successful show over roughly 11 days, whatever that looks like at this generational inflection point, will be critical to ensuring it endures in some form for years to come.

“The industry is undergoing a transformation,” said Doug North, president and owner of North Brothers Ford in Westland and 2020-21 chairman of the Detroit show. “Companies are. Dealers are. Social media and how products are shown has changed significantly in the past five years. I do see the show transformative of where it was.”

Nothing is guaranteed. The march of technology is reshaping the auto industry and its customers’ relationship to it. COVID-induced shortages of tiny semiconductor chips sourced primarily out of Asia are restructuring both production and sales processes. Deepening climate change concerns are effectively legislating internal-combustion engines out of lineups, imperiling jobs and ways of life in places like southeast Michigan.

Battery-electric vehicles are set to proliferate in mass-market showrooms, soon to test the market’s collective appetite for such radical change. Core skills needed to design, develop and build EVs are migrating away from more traditional automotive engineering spaces and toward software-based disciplines whose core competence is more likely to be found in tech spaces than automotive ones.

And the digitization of car shopping, along with new sales methods developed outside typical franchise laws, is forcing legacy automakers to reimagine their distribution, sales models and relationships with customers. The result: dealers, too, face a reckoning likely to change business as they’ve known it.

“You’ve got to evolve and embrace it,” said Thad Szott, co-owner of Oakland County-based Szott Auto Group and co-chair of this year’s auto show. “You embrace the change. And those who do will win.”

Thirty-two mainstream brands are expected to be represented on the show floor, the Detroit Automobile Dealers Association said, many of them organized by dealer groups. Nearly 2,000 media from 40 states and 30 countries are credentialed, down substantially from pre-pandemic levels. And as many as 8,000 people are expected to attend the Charity Preview on Friday and raise as much as $3 million for charity.

For this auto show, experience is the next new thing: the public will get to see electric vertical take-off and landing aircraft, amphibious sport planes, hoverbikes, hoverboards and jet suits. Families can access interactive experiences, including a life-size dinosaur display, a monster truck throwdown and, yes, a 61-foot tall rubber duck.

Not as big as the good ol’ days? Nope, but the show shouldn’t be trying to recreate the past so much as anticipate the future. If quality trumps quantity, as it now does in a retooled Detroit that rightly prizes profitability and competitiveness over size and market share, that should be just fine for the first real auto show in more than three years.

Can an auto show founded on the Detroit cornerstones of metal, gasoline and rumbling V-8s navigate that transition to ensure continued relevance to its funders (automakers and, to some extent, suppliers) and to its customers (the real people who spend their hard-earned money to buy new cars, trucks and SUVs)?

We’re about to find out. Like the Detroit industry that emerged from the global financial meltdown and bankruptcy to deep skepticism among investors, the retooled auto show and its organizers at the DADA are being tested by their own key constituencies: can they demonstrate the ability to negotiate the big shift reordering the industry?

The show opening to the media — and a visit by President Joe Biden — on Wednesday exemplifies the challenge to the automakers, their suppliers, their dealers and their hometown auto show. Forget the 30-year run of pre-pandemic auto shows, boutiquey EV startups and gas-powered muscle cars: the future is arriving with astonishing speed, it’s increasingly electrified and Detroit’s place in it all is yet to be determined.

Old models and blueprints for doing things “are just not the same,” said Glenn Stevens, executive director of the Detroit Regional Chamber’s MICHAuto unit. “If we don’t do things differently — the competition is not Silicon Valley, it’s Ohio and Ontario” and social media platforms spanning the globe.

That’s not negative. It’s the truth. Since the last edition of the North American International Auto Show, hometown automakers like Ford, GM and Stellantis have placed most of their electrification bets outside Michigan in places like Kentucky, Tennessee, Indiana and Ontario. But those same automakers, especially Ford and GM, also have launched credible EVs and quieted critics who insisted old Detroit could not hope to compete in a newly emerging space best defined by Tesla Inc.

“When it comes to the show, there’s a tremendous opportunity right now,” said Christopher Thomas, co-founder and partner of Assembly Ventures LLC, a mobility fund and adviser. “We see the zeitgeist. I don’t have a problem with a smaller show if it’s focused on quality, not quantity. I don’t want to be at the table; I want to play to win.”

He’s not alone. As the revived show opens to the media this week and to the public Saturday, how Detroit can compete and win jobs and investment, growing market share and rising market capitalization, is Job One for this town’s second automotive century. That’s because it has to be, lest entitlement and political intransigence in Lansing undermine efforts to bolster Michigan’s economic and educational competitiveness.

Recent evidence — see southern-state governors claiming to be the new capital of the new auto industry, or Silicon Valley boosters declaring Detroit dead, or Michigan’s comparative inability to compete for electrified investment — suggests the road ahead will not be easy or inexpensive.

No, it’s likely to be strange and uncomfortable as brands like Dodge signal the end for gas-powered muscle cars, as Ford reveals what could be the last Mustang powered only by an internal combustion engine, as President Biden touts administration policy backing faster adoption of EVs.

What that portends for the auto show, for the hometown automakers, for the men and women of the United Auto Workers staffing engine and transmission lines in Michigan and other states in the industrial heartland is not yet clear. One thing is certain: a Detroit auto culture that has long prized certainty cannot guarantee it amid this historic transformation.

“This is a rebuild,” said Rod Alberts, executive director of the auto show. “We don’t know the peak. We had to rebuild the show. It doesn’t matter as long as you’ve got a successful show.”

Exactly right.

Daniel Howes is senior editor/business & columnist for The Detroit News.

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